The start of the deal
By Dr. Peter Morici
President-elect Donald Trump faces the challenge of governing a deeply divided nation.
He won with overwhelming majorities of non-college-educated white men and women, especially outside large metropolitan centers.
Among college-educated and urban voters, Hillary Clinton did well and Mr. Trump faces lots of skepticism. Winning their respect will be critical to uniting the country and rebuilding an economy handicapped by too much bad government.
He promises big changes on trade and immigration. On the former, he can move quickly based on presidential authority, but accomplishing a desirable outcome will require complex negotiations with China, Mexico and others. Simply throwing up tariffs or withdrawing from NAFTA won’t secure changes in foreign government policies needed to avoid crippling international commerce, reopen shuttered U.S. factories, create jobs and lift wages for working-class Americans.
Framing U.S. negotiating objectives and selling those to partners in Europe and Japan — and winning at negotiations with China and others — will take resolve, patience and time.
Similarly, U.S. immigration policy needs radical reworking, but the nation still needs new arrivals. Crafting a policy that enforces our borders, screens for threats and welcomes those who would contribute positively to the economy, embrace American values and assimilate is a complex task. With the Republicans holding only a narrow majority in the Senate, that will require the good will and cooperation from Democrats to pass Congress and succeed.
On taxes and other issues, both the Senate and House Republican caucuses have many members with views differing sharply from Mr. Trump. He will often face the tough task of seemingly having to negotiate with two opposition parties at the same time.
To win over a skeptical public and cultivate support on Capitol Hill, Mr. Trump would do well to initially push for results in a few areas that require both immediate attention and ideological concessions from members of both parties to get something impactful done.
Just about everyone wants better roads and mass transit, and an upgrade to airports, train stations, ports and the like. Both Hillary Clinton and Donald Trump promised big infrastructure programs but as the 2015 reauthorization of federal highway funding illustrated, members of Congress are reluctant to raise fuel taxes or increase user fees to pay for those projects.
Moreover, federal contracting rules virtually ensure Americans pay too much for public investments. Those mandate that high union labor rates and burdensome work rules apply on federally assisted projects, even though unions now represent fewer than 7 percent of private-sector workers.
Mr. Trump could offer to pay for half of the cost of an infrastructure program by awarding contracts to the most competitive bids — regardless of whether union labor is employed as long as other worker protections applied — in exchange for higher gas taxes and user fees to pay for the balance.
Obamacare is a terrible burden on family budgets and federal finances. Insurance premiums are skyrocketing, and Americans pay about 50 percent more for health care than do the Germans and Dutch, who also have high-quality private insurance systems.
Simply repealing the Affordable Care Act without preserving popular provisions, such as guaranteeing that no one can be denied insurance based on pre-existing conditions and subsidies for low- and moderate-income Americans, is a nonstarter. However, those aspects of the law are driving prices for drugs, hospital procedures and the like through the roof.
The Germans recognize market disciplines are absent in most aspects of health care and freely apply price controls, but those are an anathema to most Republicans.
Mr. Trump could offer Democrats continued assistance for low- and middle-income Americans in exchange for repealing mandates for businesses and individuals to purchase health insurance. And he could require Republicans to accept price controls as the condition for repealing those mandates while maintaining other popular provisions of the law.
Such legislation could benchmark the prices Medicaid, Medicare and private insurers pay to service providers, drug manufacturers and the like to those charged by their German and Dutch counterparts.
Progress on other tough issues like taxes, immigration and burdensome business regulations will also require significant fractions within both parties to cede cherished positions, but opportunities abound for genuine progress through mutual concessions and compromise from all sides.
That’s all quite difficult. However, both Congress and the president-elect face the challenge of convincing voters they can do what ordinary Americans must do every day — be honest about facts and make tough, often painful choices to get things done.
Dr. Peter Morici is an economist and business professor at the University of Maryland, and a national columnist.